Turkey is the blog’s “go-to” market when it wants to confirm trends in global markets. The reason is that Turkey has a very successful downstream industry, but has failed to invest in upstream capacity. This means it is essentially an opportunistic market from a sellers’ viewpoint. During good times, exporters will only divert product from […]
Tag Archives | Polyethylene
Global metal markets are at growing risk from developments in China’s ‘collateral trade’, as yesterday’s post highlighted. Worryingly, so are products such as polyethylene and ethylene glycol, as it seems likely these have also been used as collateral more recently. This will be bad news for producers already suffering from slowing demand: China’s economy continues to weaken as the […]
Iron ore prices on China’s futures market were at 5-year lows yesterday. Copper prices also weakened in Australia. This adds to the blog’s concern that China’s ‘collateral trade’ market is getting closer and closer to its ‘moment of truth’. This will come as an awful shock to most outside observers, who have been led to believe China’s vast imports […]
Polymer traders must be already counting their end-of-year bonuses, as the value of the US$ rises whilst crude oil prices weaken. The biggest bonuses will likely go to polyethylene (PE) traders competing with US producers. The reason is that US ethylene spot prices are currently at record levels. An astonishing 10% of US ethylene capacity has been out […]
Very large amounts of copper, iron and other commodities are in long-term storage in China as part of the ‘collateral trade’. More recently, it seems large amounts of polyethylene (PE), ethylene glycol (MEG) and probably other chemicals have also started to be used for the trade. None of this used to matter when the Chinese economy was booming. Why […]
The blog’s latest post for the Financial Times, published on the BeyondBrics blog is below. By Paul Hodges of International eChem Strange things are happening in China’s polyethylene (PE) market. Despite a slowdown in the economy, demand is surging. Our research suggests that PE, like copper and iron before it, is the latest instrument of China’s […]
Strange things are happening in China’s polyethylene (PE) market, as the chart shows: Imports suddenly jumped 26% in Q1 (red column) versus last year (green) This would be an extraordinary amount at any time, but especially now with the economy slowing It comes at a time when China’s own production continued to increase, up 8% As a result, […]
China’s growth has been the main support for the global economy since the Crisis began in Q4 2008. The slide above captures the extent of this in polyethylene (PE), one of the world’s largest chemical markets, based on data from China’s chemical association and Global Trade Information Services: The total market grew 11% in the 3 […]
Will the US be able to sell all its planned new petchem volumes? That is the 3rd topic in the blog’s series about critical areas where we all think we know what’s happening, but may end up being surprised. We all know that the US now has a major feedstock advantage versus Europe, Asia and Latin America due […]
2013 has seen 3 types of markets develop for the blog’s IeC Downturn Monitor portfolio as the chart above shows: Financial assets such as the S&P 500 (purple) have soared, as did the US$ against the yen (orange) Crude oil (blue) and naphtha (black) tried to follow, but found it difficult to pass though the higher prices Benzene (green) and […]
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Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry.
The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts.
Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.